Jakarta. Indonesia does not suffer from a lack of investment but from low productivity generated by that investment, Indonesia Deposit Insurance Corporation (LPS) Chairman Anggito Abimanyu said on Wednesday, urging the government to focus on making investment more productive as it seeks to push economic growth beyond 5%.

Indonesia’s investment ratio stood at 30.7%, while its incremental capital-output ratio (ICOR) remained around 6, Anggito said in a keynote speech at the Investor Daily Summit 2026.

“Our investment problem is not a lack of investment. The problem is the productivity of investment,” Anggito said.

He said Indonesia should not simply seek to increase its investment ratio without improving how efficiently capital is converted into economic output.

“The investment ratio needs to increase, but at the same time, the ICOR must come down. Otherwise, we are only adding inputs without producing a leap in output,” he said.

Anggito compared Indonesia with economies such as China, India and Vietnam that have sustained growth above 5%. He said the policy priority should therefore shift from simply attracting more capital to securing better investment.

“Indonesia’s 5% growth shows resilience, but it is not enough to make the leap toward becoming a high-income country,” Anggito said.

He identified several bottlenecks holding back productivity, including high logistics costs, a relatively shallow financial sector, industrialization that remains concentrated too far upstream, policy uncertainty and a mismatch between the skills of workers and industry needs.

“These problems do not stand alone,” he said. “We cannot improve industry without logistics, increase investment without financing, or build technology without human resources.”

Anggito called for reforms to be carried out simultaneously rather than through separate sectoral policies, saying Indonesia needs an integrated economic transformation ecosystem.

He also said the state budget (APBN) should serve as a catalyst for investment rather than become the sole source of development financing.

“The APBN must be a catalyst, not the only source of development funding,” Anggito said, referring to the state budget.

Indonesia needs to mobilize longer-term financing through bonds, sukuk, pension funds, insurance and capital markets, while sovereign wealth funds, blended finance and special economic zones can be used to reduce investment risks and attract private capital, he said.

The ultimate objective, Anggito said, should be to convert domestic savings into domestic investment while attracting global savings into productive investment in Indonesia.

“The APBN should be used to crowd in private investment, not crowd it out,” he said.

He added that the success of fiscal policy should not be measured simply by how much money is spent, but by the investment, productivity, jobs and added value generated by every rupiah.

“Indonesia does not lack potential. The challenge is how we turn that potential into productivity, added value, quality jobs and prosperity,” he said.

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